Three excellent reports addressing defense budget reform were released between February 25 and March 8, 2021:
- Competing in Time: Ensuring Capability Advantage and Mission Success through Adaptable Resource Allocation
- National Security Commission on Artificial Intelligence: Final Report
- Five by Five: Five Disciplines and Five Strategic Initiatives for the Pentagon in the Digital Age
The video below provides an outline of their recommendations for transforming the Planning-Programming-Budgeting-Execution (PPBE) process. All three center around the idea of portfolio management. Watch the whole thing.
And be sure to join us on Tuesday, March 23 at 12pm EST when I sit down with contributors to each of the reports to discuss their findings. It will be followed up with another distinguished panel at 1pm EST discussing actual pathways to implementing reform. More information is here, and register here.
At the heart of the problem is the classification of the budget structure. The PPBE revolves around program elements in which funding is allocated to specific weapons platforms. Not only does it take years to get a program started or make changes, the process creates little empires across DoD which cannot interoperate in the joint force without a bunch of manual translation. The whole construct of the PPBE, implemented in the 1960s, runs counter to international and commercial practices. As NSCAI Chair Eric Schmidt noted to the SASC:
I’ve stated before that the DoD’s problem is not innovation, but innovation adoption. Its outdated, industrial-age budgeting process creates a valley of death for new technology… [Emphasis added]
Make 2021 the year of budget reform!
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